Okay, this is a bit in the weeds. But it's worth it. This morning the Republican National Committee blasted out a story from The Hill about a new nonpartisan study finding that the poor will be hit hardest if all the Bush tax cuts are allowed to expire. An RNC spokesman, taking a shot at the Dems' failure to extend the tax cuts, rhetorically asked: "What excuse will the Democrats use now?"
Here's the funny thing, though. While that study does indeed find that letting all the tax cuts expire does disproportionately hurt the poor, it also finds that the plan Dems have actually proposed on the Bush tax cuts is better for the poor than the Republican one.
The study, by the nonpartisan Tax Foundation, took a look at how letting the tax cuts expire impacts the after-tax income of people at different income levels. The study's numbers show that letting them all expire would hurt the poor more, because the change in income would matter a lot more to them.
But using this study to attack Dems is misleading. Republicans are framing the current policy dilemma as a choice between keeping all the tax cuts or letting them all expire. But Dems aren't proposing to let all the tax cuts expire. Rather, they would continue the tax cuts for those under $250,000, while letting only the high end ones expire. The Congressional Dem plan would also renew some temporary stimulus tax-break measures enacted last year that are set to lapse.
As it happens, the study compared the actual Dem plan with the GOP one. And it found that for a family of four with an income of $40,000, the Dem plan -- continuing the low end tax cuts, plus the stimulus measures -- would cause a 7.8 percent jump in after-tax income. That jump would only be 6.8 percent under the GOP plan to let all the Bush tax cuts expire.
For a single parent with two kids and an income of $20,000, that difference is even more pronounced. The jump is 8 percent under the Dem plan, and only 4.4 percent under the GOP one.
In fairness to the RNC, the study is good for the GOP in one sense. It confirms that the Bush tax cuts were helpful to the poor, despite popular belief that they only helped the rich. But the author of the study, Nick Kasprak, confirms that this finding isn't directly relevant to what Dems have proposed.
"Our study shows that the Bush tax cuts helped the poor a lot more than the popular perception, so the RNC is right to send it around for that reason," Kasprak tells me. "But the study also shows that the Congressional Democrats' plan is more generous to the poor, because it extends certain stimulus provisions into 2011, which the Republican plan does not. That isn't what the RNC wants to show."
